Microsoft responds to US DOJ anti-trust charges

The government doesn't understand how software manufacturing works, Microsoft officials said yesterday in response to charges from the US Department of Justice that the software giant has violated a 1995 court order. The department, which alleges that Microsoft has been anti-competitive, also is confusing issues by looking at the company's Internet Explorer separately from the Windows 95 operating system, said William Neukom, Microsoft senior vice president for law and corporate affairs. He predicted that the million-dollar daily fines quested by the DOJ will never be levied.

The government doesn't understand how software manufacturing works, Microsoft officials said yesterday in response to charges from the US Department of Justice that the software giant has violated a 1995 court order.

The department, which alleges that Microsoft has been anti-competitive, also is confusing issues by looking at the company's Internet Explorer separately from the Windows 95 operating system, said William Neukom, Microsoft senior vice president for law and corporate affairs.

"I think that the government ... may be confusing the discussion by trying to put labels on products," he said during a press conference.

The Department of Justice asked a federal court to hold Microsoft in civil contempt by requiring PC manufacturers to license and distribute Internet Explorer as a condition of licensing Windows 95. The department asked that an unprecedented fine of US$1 million be levied against Microsoft, whose Windows operating system is in about 80% of all US PCs.

Neukom and other Microsoft officials said in a company statement and at the press conference that the government knew that Microsoft planned to manufacture and distribute Internet Explorer as part of the Windows 95 operating system.

PC manufacturers are not prohibited by licensing agreements with Microsoft from providing other software, even if it comes from a company that competes with Microsoft, Neukom said.

The 1995 consent decree in question allows Microsoft to include new products as part of its operating system upgrades, he said. Users want to have an Internet browser as part of the system, he added.

The department petition, filed in US District Court for the District of Columbia, asks the court to stop Microsoft from requiring PC manufacturers to accept Internet Explorer and also to strike down sections of non-disclosure agreements the company requires.

"We're frankly surprised by that," Neukom said, adding that the non-disclosure requirement Microsoft has with companies with whom it does business is "very standard."

The department, however, charges that companies that might otherwise come forward to provide information in the investigation of Microsoft practices are intimidated into silence by the non-disclosure provisions.

Microsoft, which is the focus of both a federal inquiry as well as probes in at least four states, will "vigorously defend" its practices, said Neukom, who predicted that the Justice Department's request of the court never will reach a point where fines are levied.

"We intend to respond to this petition and to persuade the court of the merit of what we're doing," Neukom said, adding that plans to ship Windows 98 by the middle of next year will proceed as planned, with Internet Explorer part of the package.

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